Forex and derivatives losses eat into Yinson’s 1Q net profit

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KUALA LUMPUR (June 30): Yinson Holdings Bhd saw its net profit for the first quarter ended April 30, 2015 (1QFY16) fall 65.51% to RM10.45 million or 1.01 sen per share from RM30.3 million or 3.19 sen per share a year ago, on foreign exchange (forex) losses from unfavourable currency fluctuations.

However, its core net profit for the quarter rose 11.5% to RM40.6 million from RM36.42 million a year ago, according to its filing with Bursa Malaysia today.

Yinson's (fundamental: 1.5; valuation: 1.5) forex loss widened to RM10.64 million compared to RM3.81 million a year ago due to appreciation of Malaysia ringgit against the US dollar.

On top of that, it also suffered a RM2.85 million realised loss on derivatives and RM10.22 million fair value loss on derivatives.

"Our core earnings for our current financial quarter remained strong despite the various external negative impacting factors," said Yinson executive chairman Lim Han Weng in a statement today.

"The downside risks to growth outlook continue to persist due to prolonged weakness in domestic demand; however, it is a positive sign that the price of oil has started to stabilise," Lim added.

Revenue for the quarter came in at RM256.6 million, 12.74% lower compared to RM294.07 million in the last corresponding quarter.

Despite the challenging global economic environment, Yinson said it will strive to end the year on a positive note.

Shares in Yinson closed unchanged at RM3.05 for a market capitalisation of RM3.15 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)